Drug-induced liver injury (DILI) represents a major impediment to the development of new drugs and is a leading cause of drug withdrawal. The occurrence of hepatotoxicity has been closely associated with the formation of chemically reactive metabolites. Huge investment has focused on the screening of chemically reactive metabolites to offer a pragmatic approach to produce safer drugs and also reduce drug attrition and prevent market place withdrawal. However, questions surrounding the importance of chemically reactive metabolites still remain. Increasing evidence now exists for the multi-factorial nature of DILI, in particular the role played by the host immune system or disease state in the pathogenesis of DILI. This review aims to evaluate the current measures for the prediction and diagnosis of DILI and to highlight investigations being made to understand the multidimensional nature. Some of the steps being made to generate improved physiological systems to identify more sensitive, reflective mechanism-based biomarkers to aid the earlier identification of DILI and develop safer medicines are also discussed.